Buy Hold Sell: The best and worst performers of FY25

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Edited Transcript

Grady Wulff: Hello and welcome to another episode of Livewire's Buy Hold Sell. I'm Grady Wulff. Now, valuations have been the talk of the town over the last year, FY '25, with some valuations soaring and some names definitely underperforming, but will this continue into FY '26?

To discuss this, I'm joined by James Gerrish of Market Matters and Henry Jennings of Marcus Today. What better way to start, gentlemen, than talking with the top five performers and top five underperformers of the last financial year.

James, I will start with you. Evolution Mining, it's up 143.4% over the last 12 months. Are you buying, holding, or selling head into FY '26?

Evolution Mining (ASX: EVN)

James Gerrish (HOLD): We own it. We're holding it for now but would buy it at lower levels. My only reservation being is that gold's really a super over-owned trade and concerns around the potential for the US dollar to rally from here. The short US dollar thesis is really overcrowded as well. So if the US dollar rallies, I think gold could come off and we'll get a better opportunity to top up our Evolution holding. So somewhere in the 7 to $8, we'd be buyers.

Grady Wulff: Henry, Evolution Mining, buy, hold, sell?

Henry Jennings (HOLD): Pretty similar, really. We do hold it. I would continue to hold it. I like Jake Klein. He's done a fantastic job at Evolution. It's got the copper exposure, which I like. 34% of revenue is copper, which is good. I agree with James about the gold side of things. It has run really hard. UBS downgraded it a couple of days ago as well as Northern Star, and that really took the wind out of its sails. So I'd just be careful, let it settle. I'd be a buyer on the back foot, accumulator. I still like gold. I think gold is going to be 4,000 bucks this year for whatever reasons, and there's plenty out there, but I think every now and then you shake the trees and people drop off. And I think at the moment we're having a bit of tree shaking, but it's definitely a hold.

Temple and Webster Group (ASX: TPW)

Grady Wulff: Temple & Webster, a company I'm very familiar with at the moment. Buying lots of furniture for my house with Temple & Webster. So are you a fan? Buy, hold, or sell?

Henry Jennings: I've never used the Temple & Webster service. Maybe I should.

Grady Wulff: It's fantastic.

Henry Jennings: Is it?

Grady Wulff: As a customer, yes.

Henry Jennings (BUY): I have to say I was always sceptical about buying sofas and furniture online because you like to sit on the-

James Gerrish: You're the old Harvey Norman man.

Grady Wulff: Or Nick Scali?

Henry Jennings: No, I've never done either of those two either… it's King for me.

Grady Wulff: Of course, it is.

Henry Jennings: I like Temple & Webster. I've got to say their website has expanded dramatically. They seem to be very good at social media. It's a tech stock with a tech platform and clearly witness for the prosecution…

Grady Wulff: Preaching to the choir.

Henry Jennings: Preaching to the choir here, there's clearly a need for people who are time-poor who want to buy stuff online, and I think it's done a great job. So I'd be continuing to buy this one, I think.

Grady Wulff: James, are you a fan? Buy, hold, or sell up? 140%.

James Gerrish (SELL): Yes, phenomenal run. I'm going to go a sell on TPW. I have used it multiple times and I think it is great. I think one of the things that have driven the share price higher in the last six months or so has been an expansion in margin, which has been an area they've been really grappling to improve. And I think that the update that they provided showed some one-off impacts to that margin expansion.

So if you look at their guidance for the second half, it implies that margins will contract in the second half. So I think when the share price has upped up by that much, I think it's too expensive for what they're delivering. And they've had a great run. They also call out themselves as being real strong beneficiaries of tariffs. So we're getting easing tariff situation, so that should be one of those tailwinds that come off the boil a little bit for TPW. So it's all been great until now. I don't have any great reservations for the stock, but it's too hot for me.

Generation Development Group (ASX: GDG)

Grady Wulff: James, GDG, Generation Development Group, up 124% over the last 12 months.

James Gerrish: Phenomenal.

Grady Wulff: You're buying, holding, selling?

James Gerrish (HOLD): I'm a hold. I think the way they structured the business is great in a few different areas. So tax-effective bonds. They've got independent research through the purchase of Lonsec, and then they've got a managed platform or managed account business, which is going phenomenally well. So they've put all these three things together. I operate in a similar business to these or sector to these guys, so I can see the rationale for doing these things. It's attracting really strong FUM on 21-22x earnings, for me it's on the rich side. Every fundie out there in the mid-cap space has been promoting this one. So I think it's all of the hot money has gone into it. I think it'll take a while for it to grow into its valuation.

Grady Wulff: Henry, are your sentiments the same or are you differing to James here with the Generation Development Group?

Henry Jennings (SELL): I guess I'm not differing that much. They did have a big wobble after the latest results, which was a fantastic opportunity. And I must admit I jumped on board at $4.15 and thought I was being really smart getting out at $5.05. And they've just kept going ever since. Grant Hackett is the man behind this and he has done a terrific job. And as James says, it's a great platform. The Lonsec thing really has helped them. I think it's just got, because I sold it at $5.05, maybe I'm feeling a little bit of seller's remorse and I've probably look to trim this one. I know we don't do buy, hold, trim, but I'd think I'd be taking some profits. It's run really hard. The market was well and truly spooked with the results. It got below $4.15. I looked a bit silly for a while and then it just kept going up and up and up and up, but I think I'd be trimming just taking some profits in this one. So probably a sell up here.

TechnologyOne (ASX: TNE)

Grady Wulff: Now, in the tech space, TechnologyOne, it's a name a lot of investors know and love and at the moment, up 120%. Buy, hold, or sell?

Henry Jennings (HOLD): Rudi's a happy bunny, isn't he? I couldn't go against Rudi. It's for me, it's a hold at the moment. It's done a great job, executed really well. The cream rises, and this one has been shown to be one of the cream stocks in our market. So I think hold, but only because it's run so hard.

Grady Wulff: James, TechnologyOne, thoughts? Buy, hold, sell?

James Gerrish (SELL): I've got to sell. I think they've, to Henry's point, they've executed really well, but they're now just simply too expensive for the type of business they are. So they do have levers to pull in terms of growth. They're obviously dominant here in Australia. They're growing a lot over in the UK so they've got ARR growth above 50% over in the UK. They're winning federal government work, which is another positive thing for them. At 42 bucks, I can't get my head around valuation. But in saying that, I've been wrong. So I've been thinking this for a while. So I'll put my hand up and say these things that execute particularly well have been a bit up above where I think they're worth. So not one for me, Grady.

Life360 (ASX: 360)

Grady Wulff: And to round out our top five top performers, Life360 or 360 ticker code. That's run pretty hot, 95.9%. James, buy, hold, or sell?

James Gerrish (HOLD): Yeah, phenomenal stock. I've got it as a hold now, but I do like it. So this is a fan favourite. Everyone talks about 360. I think there's a couple of catalysts that they need to get right in the back end of the year. They're obviously expanding their market into pets. You think about a platform business, you get users on your platform and then you monetise those users. So if people like their platform, people continue to use their platform, and people are paying more for it, so then you plug in all sorts of different things throughout your life. If they do that intelligently and continue to present good user experience, they'll be able to leverage in a heap of different areas. So leveraging a user base is the key to a platform business, and they're doing a pretty good job of it. So hold for me. We'll see how the pets roll-out in Q4 and we get a bit more understanding around the actual metrics around that.

Grady Wulff: And how many pets get lost? Henry, buy, hold, or sell for Life360?

Henry Jennings (HOLD): I've always thought this one is slightly creepy, being able to track things. And that's fine tracking your children perhaps when they're 8, 9, 10 or whatever, but maybe as they get older. Competition… there is a lot of competition as well. You walk into JB Hi-Fi, there's a lot of competition in that pet space. There's a lot of competition from Apple, Find My Friends, Find My Phone.

Grady Wulff: AirTags, yeah.

Henry Jennings: AirTags, et cetera. So there is a lot of competition. James is right in the terms of they've got all these users and they can monetize it. That's really useful and that can be huge, but we've seen that argument from the banks over the years. We've got all these customers. We're just going to sell them this, this, this, this, this, this, this, this, this, and people are going, "You know what? We don't want all that crap. We just want the banking service. We don't want the other stuff." So I think there's a danger there. It is huge in States. It is an American tech stock. Tech is still very much in demand. AI is going to help it. It's a hold, but I do find it creepy and I do worry about competition, especially if Apple decides to do something similar. It's not a million miles away, is it? AirTags, pets, tracking your kids.

Grady Wulff: But we're running off iPhones as well. So Apple just embed it straight into the phone.

Henry Jennings: Exactly.

James Gerrish: Then it'd be really creepy.

Grady Wulff: Then it'd be even creepier... because then we all have it.

Henry Jennings: It's creepy enough.

IDP Education (ASX: IEL)

Grady Wulff: Okay, let's go to the bottom end of the stock market. The place we like to avoid but have to talk about, IDP Education. Henry, down 76.5%. Is there upside potential?

Henry Jennings (SELL): I really don't see a lot of hope at the moment, to be honest. I think the political environment is way and truly against it. The moves from government to limit house price rises through immigration controls and student controls is overwhelming. What Trump is doing is spreading… Canada, the UK, Australia, and we were already crimping university students. I really don't see a catalyst for change in this one. I think it's an avoid… way too early. It has plummeted. I think the Australian universities that sold out… did they sell out? I think they did. They did very well. They saw the writing on the wall. The deans earned their money that year. But yeah, no, I think this is an avoid for the time being.

Grady Wulff: So avoid for that one. James, unfortunately IDP really sold off recently. Do you see light at the end of the tunnel?

James Gerrish (HOLD): Well, it's been, it's had a number of downgrades. So the last one saw it down to what's it trading, at 4 bucks, where they downgraded volumes by 30%. Stock price moved by 50%. It's gone from, I think from memory, 18 bucks down to 4. That is a huge move in a stock that was incredibly well-loved for a lot of investors.

Grady Wulff: It had a time and place, for sure.

James Gerrish: It did. So you think you sit back and think about, I totally agree, in the next six to 12 months it's going to be I don't see there being a turnaround there. But if the model's not broken, completely broken, then this will represent value at some point. We're probably too early now. They've downgraded the stock or bob along the bottom for a while until investors get confidence or the trends start to improve. But I would put this on your watch list and be one to see when the trends start improving. This has a big runway to improve in terms of share price.

Grady Wulff: In it, hold it?

James Gerrish: I'd be a hold if I'm in it and looking to buy it in six to whatever month when we start to see improving trends.

Grady Wulff: So premature right now?

James Gerrish: A little bit premature right now. We've had multiple downgrades. It's on its knees. It doesn't have balance sheet stress, so it'll get through. So it's actually, I find it interesting down here.

Mineral Resource (ASX: MIN)

Grady Wulff: Now, Mineral Resources, one that's broken a lot of hearts, including my own.

James Gerrish: Yeah, mine too.

Grady Wulff: Let's talk about Mineral Resources. Buy, hold, or sell? Down 52.32% over the last 12 months.

James Gerrish (BUY): Well, I've backed it for the year. We're not down by that amount, but we're still down on our position. I've got it as a buy. I think the trends around debt will be addressed. The market will get confidence again in MinRes. You look at their bonds, their bonds have started to blow out a little bit, but it's only at the margin. There's not a huge amount of concern from a lender perspective, a credit perspective. So maybe on the iron ore and getting Onslow back on track. They held an analyst day out on the Hall Road two weeks ago, which hopefully instilled some confidence in their ability to... Because they have built a huge operation there. You can't take that away from them. Yes, they're a bit squeezed in terms of debt at the moment. Yes, Chris Ellison has done some things that he probably regrets doing, but the asset there is a big one and there will be, you'll realise value out of this asset. Sometimes you just got to be patient and see through this short-term noise, and Henry's going to rebuff this and go the other way.

Grady Wulff: Henry, are you going to rebuff this?

Henry Jennings (HOLD): Well, not completely. You can see the attractions because it has been such a dog and it has been wrapped up with the whole Chris Ellison thing. But the two key commodities, iron ore and lithium, not great commodities to be in. The Hall Road has had problems with trucks just dropping off them, which is not great. And they have got $5 billion worth of debt, which is not a good place to be in. So I think it is probably not a bad trading stock. There's a big short position so when it runs, it runs. But when the shorts gather themselves back up again and nail their courage to the sticking place, it's back on with the shorts again. So it's probably a great trading stock in that respect. It's probably a hold and it's a buy at 15 bucks. It's probably a sell at 28 bucks and where it is now.

James Gerrish: Gee, we're near the sell then, Henry.

Henry Jennings: Yeah. Well, you look at the iron ore price, $92.30 or whatever it was today in Singapore, and you look at where lithium and there's no sign of any bounce in the lithium.

James Gerrish: No, there’s not a lot of value ascribed to the lithium components of their business.

Henry Jennings: There's not a lot ascribed to the iron ore either now. And strategically, it would be hard for them to be taken out by a bigger player, especially a foreign player. We've got Santos at the moment as well. It would be strategically hard for a foreign player to take them out. You've got the Chris Ellison factor there still. I think this is it's a trading stock. It's a hold, but it's lithium and iron ore struggle street.

Paladin Energy (ASX: PDN)

Grady Wulff: Absolutely. Now, sticking in the resources space, Paladin Energy down 48.48% in 12 months. Buy, hold, or sell? Uranium is back. Are we bullish?

Henry Jennings (BUY): Well, uranium stocks are back. We haven't seen a real jump in uranium spot price, but I've always had this theory that the spot price is manipulated anyway and it's all a big conspiracy. And I did discuss it with Guy Keller at Tribeca and he said it's the hardest. He's traded commodities for 20, 30 years. He said it's the hardest commodity to pick and analyse because it's such a thin spot market and everything is on long-term contracts, which they get freaked out when the spot market goes bad. Paladin, they had problems, a bit of rain issues in Namibia, rain too much. I think this one is back on track. I think the commodity itself is clearly starting to get that momentum. $200 million worth of spot price buying is going to help, and it's heavily shorted. And when you play the uranium game, the go-to is Paladin. I think it's a buy. I'm with James on this one.

Grady Wulff: James?

James Gerrish: Yeah, I've got it too.

Grady Wulff: Is Henry giving it away?

James Gerrish (BUY): I've got it as a buy, Grady. I think there's a couple of things that are changing the narrative around uranium. We've had obviously a lot of the tech companies over in the US talk about contracting nuclear energy under the long-term deals. So that's a big tick over there. We've got President Trump who has become a lot more or is positive on nuclear power. So that's a tick there. And now we've got the spot market has been just in a hiatus for a little while. It was trading above a hundred bucks a pound. It's now about 75 bucks a pound. But the majority is done contract pricing. Contract pricing is being done at higher levels than spot, but spot drive sentiment in uranium and sentiment in uranium stock. So I think that to me is it's high risk, it's volatile, all those things. But if you close your eyes, I think Paladin will be significantly higher in the next 12 to 24 months than it is today.

Bellevue Gold (ASX: BGL)

Grady Wulff: Now still in resources, a gold producer, Bellevue Gold, has been battered down pretty bad lately. BGL, 48.46% down. Are we buying, holding, or selling?

James Gerrish (SELL): Gee, I'm going to throw it on a sell. It's not one I'm across significantly. But you think about they've had production issues. They've had management issues. They've hedged their gold price at the wrong time, throw in a capital raising at a 20-odd percent discount or whatever they did at that to boot as well. To me, buying gold for me is more of a macro play. As long as the companies are executing operationally, that's where I want to be in terms of gold. And Bellevue has just had so many operational missteps for me.

Grady Wulff: It's been a very tough run. Henry, Bellevue, upside potential?

Henry Jennings (BUY): It'd be hard to lose money, wouldn't it? Being a gold miner.

James Gerrish: You'd be infuriated.

Henry Jennings: You would be ripping your hair out.

James Gerrish: What could have they done worse?

Henry Jennings: They have stuffed it up, right, royally. The good news is I guess is they've unwound their hedge book. The argument could be that they've managed to pick the top of the gold market to unwind it, but at least they've used other people's money to do so.

James Gerrish: And diluted, yeah.

Henry Jennings: And diluted the existing shareholders. For me this is a buy mainly because they've stuffed it up so badly and there is so much M&A attraction in the sector that the resource is still in the ground. That's the beauty of a gold company. As long as the resource is still there and the grades are still there, even if you stuff up production and you miss production for one year, in some ways that can be good because if the gold price keeps going up, then the production that gets pushed into the next year is worth more money. So clearly they sorted out the debt issue to some extent with the equity raise. They sorted out the hedging. Management's been crap, but the resource is still there and somebody is going to buy this because it's just cheaper. It's cheaper to buy a resource that they know and they've got some certainty over. They'll bid a $1.20, it'll go for $1.30 and everyone will go, "Oh, thank God for that." It'll put everyone out of their misery.

Grady Wulff: I've been down the mine and it looks pretty good. I've even seen them pour gold and it looks pretty good.

Henry Jennings: Well, that's the thing with gold company, with any resource company. As long as the resource is there and they haven't stuffed up all the models and the grading, et cetera, it's valuable to somebody and somebody will put the management out of their misery and get back on track. So that for me is a buy.

Polynovo (ASX: PNV)

Grady Wulff: So let's jump elsewhere in terms of sectors. Polynovo, down 46.73%? That's a big sigh there, Henry. Talk to me. Buy, hold, or sell?

Henry Jennings (HOLD): It's been tortuous, hasn't it? It's had so much promise. It continues to have record months in terms of sales of Novosorb in the US but clearly there are issues in the US in terms of healthcare and uncertainty. It's heavily shorted. It's gone from two bucks to $1.20 or something at the moment. I wouldn't be chucking it out here. It's done the damage, but I'm not sure what the catalyst is for a re-rating at the moment. Even if they put in another record month of sales, everyone's going to go, "Yeah, so what?" Maybe we need to see some certainty in the US healthcare system, I think. And that applies to CSL, that applies to a lot of US exposed healthcare stocks. We just need that certainty. And it's still early days. We've got another three and a half, four years of-

Grady Wulff: Mr. Trump.

Henry Jennings: Well, not just Mr. Trump. Mr. Kennedy as well. That's a...

Grady Wulff: That's the problem.

Henry Jennings: So here it's a hold, big short. It's doing all the right things, but it just needs some certainty.

Grady Wulff: Do you differing view on Polynovo, James?

James Gerrish (SELL): I've got in on a sell, only because you go through the red flags that companies deliver. And they've had management issues. They've missed guidance. They've been a pretty highly valued stock before all of these issues played out so you get a big run for the exits. To me, it's difficult enough with good management. When you've got guys in there that are running it, that are struggling, that have had all sorts of issues presented to them, it becomes too hard. So there's no reason to be there. If you're there, you're holding and hoping as opposed to having a really structured, reasoned investment thesis to be there. So it's a sell for me, but I'm no expert in the space. So take it with a grain of salt.

Grady Wulff: James and Henry, thank you for joining us, and thank you for joining us for this episode of Buy Hold Sell with Livewire. If you enjoyed the episode as much as we did filming it, I hope you subscribe to our YouTube channel.